Eight-year tax holiday for IT companies

PHUKET: A new Memorandum of Understanding (MOU) signed by the Software Industry Promotion Agency (Sipa) and the Board of Investment (BoI) exempts IT companies from company tax for eight years, and enables them to import IT products and services duty-free.

The MOU, signed on August 24 by Sipa President Dr Manoo Ordeedolchest and BoI Secretary General Somphong Wanapha, is designed to promote the software and e-commerce industry in Thailand.

Chalermcharn Yotviriyapanit, Sipa officer in charge of BoI and Sipa cooperation, explained that BoI-approved IT companies registered with Sipa will be exempt from import duty on IT products and services not available in Thailand, and will not have to pay company tax for eight years from the date of BoI approval.

To be eligible for the special status, companies must use procedures approved by Sipa and show investment of at least a million baht, excluding land value and working capital.

K. Chalermcharn said that 20 software companies had applied to Sipa since the MOU was announced, and that five of these applications would be considered this week. Successful ones would be passed on to the BoI for approval.

Although Sipa’s Phuket office will check applications from local companies wishing to take advantage of the scheme, it is up to the applicants themselves to submit their papers to the main Sipa office in Bangkok.

The approval process is expected to take around 60 days.

Registration application forms may be downloaded here.